Keynes was half right about the facts

August 6, 2015

Economics: Keynes was half right about the facts

by John Kay

The capacity to act while recognising the limits of one’s knowledge is an essential, but rare, characteristic of the effective political or business leader…To admit doubt, to recognise that one may sometimes be wrong, is a mark not of stupidity but of intelligence. –John Kay

When I was much younger and editing an economics journal, I published an article by a distinguished professor — more distinguished, perhaps, for his policy pronouncements than his scholarship. At a late stage, I grew suspicious of some of the numbers in one of his tables and, on making my own calculations, found they were wrong. I rang him.

Without apology, he suggested I insert the correct data. Did he, I tentatively enquired, wish to review the text and its conclusions in light of these corrections, or at least to see the amended table? No, he responded briskly.

The incident shocked me then: but I am wiser now. I have read some of the literature on confirmation bias: the tendency we all have to interpret evidence, whatever its nature, as demonstrating the validity of the views we already hold. And I have learnt that such bias is almost as common in academia as among the viewers of Fox News: the work of John Ioannidis has shown how few scientific studies can be replicated successfully. In my inexperience, I had foolishly attempted such replication before the article was published.

It is generally possible to predict what people will think about abortion from what they think about climate change, and vice versa; and those who are concerned about wealth inequality tend to favour gun control, while those who are not, do not. Why, since these seem wholly unrelated issues, should this be so? Opinions seem to be based more and more on what team you belong to and less and less on your assessment of facts.

Lord Keynes

Lord Keynes…When Facts change…

But there are still some who valiantly struggle to form their own opinions on the basis of evidence. John Maynard Keynes is often quoted as saying: “When the facts change, I change my mind. What do you do, sir?” This seems a rather minimal standard of intellectual honesty, even if one no longer widely aspired to. As with many remarks attributed to the British economist, however, it does not appear to be what he actually said: the original source is Paul Samuelson (an American Nobel laureate, who cannot himself have heard it) and the reported remark is: “When my information changes, I alter my conclusions.”

There is a subtle, but important, difference between “the facts” and “my information”. The former refers to some objective change that is, or should be, apparent to all: the latter to the speaker’s knowledge of relevant facts. It requires greater intellectual magnanimity to acknowledge that additional information might imply a different conclusion to the same problem, than it does to acknowledge that different problems have different solutions.

But Keynes might have done better to say: “Even when the facts don’t change, I (sometimes) change my mind.” The history of his evolving thought reveals that, with the self-confidence appropriate to his polymathic intellect, he evidently felt no shame in doing so. As he really did say (in his obituary of another great economist, Alfred Marshall, whom he suggests was reluctant to acknowledge error): “There is no harm in being sometimes wrong — especially if one is promptly found out.”

To admit doubt, to recognise that one may sometimes be wrong, is a mark not of stupidity but of intelligence. A higher form of intellectual achievement still is that described by F Scott Fitzgerald: “The test of a first-rate intelligence,” he wrote, “is the ability to hold two op­posed ideas in the mind at the same time and still retain the ability to function.”

The capacity to act while recognising the limits of one’s knowledge is an essential, but rare, characteristic of the effective political or business leader. “Some people are more certain of everything than I am of anything,” wrote former US Treasury secretary (and Goldman Sachs and Citigroup executive) Robert Rubin. We can imagine which politicians he meant.

Malaysia: Return to the Malaysian Village

July 23, 2015

Malaysia: Return to the Malaysian Village

by Tash Aw

Parit is a small town of roughly 2,000 people in the state of Perak, deep in the rural heartland of Malaysia, with no distinguishing feature other than its attractive location on the banks of a muddy river, which served as the backdrop to a few scenes in the 1999 movie “Anna and the King.” Once a convenient and bustling stopping-off point on the winding road from Ipoh, the state capital, to Taiping in the north, Parit suffered from the construction of the North-South Expressway in the 1990s, which diverted passing trade away from the town.

Parit, PerakParit, Perak

Today the shops that line its two main streets are either closed for good or open only erratically, the paint on their stuccoed facades faded and patchy with moss — a poignant reminder of the decline of rural life in Malaysia over the past three decades. Parit is among the hundreds of country towns and villages that have suffered from the relentless urbanization that has accompanied Malaysia’s remarkable economic success since the late 1980s.

I spent my school vacations there for a decade, starting in the late 1970s, staying with my grandparents who owned the general store. My uncle still runs it, though the shop is half-empty these days, the children’s toys that remain are covered in dust, and the cellophane wrapped up around the small pile of school uniforms is yellowing. Like most young people who grew up there, my cousins have all moved to cities to find work — to Kuala Lumpur, Johor Bahru or Singapore.

The speed with which Malaysia has transformed itself from a sleepy former British colony into what the World Bank calls an “upper middle income” country has been impressive: The country’s average growth rate of 6 percent over 25 years has made it the richest state (by G.D.P. per capita) in Southeast Asia after Singapore. Economic growth has been accompanied by a breathtaking rate of urbanization: In 1960, about two-thirds of the population lived in rural areas; today, 74 percent of Malaysians live in cities.his growth poses a major organizational challenge for Malaysia’s large cities. On most days, rush-hour traffic in Kuala Lumpur brings the capital to a near-standstill. Even in the sprawling middle-class suburb of Petaling Jaya, cars inch along bumper-to-bumper between the school run and dinnertime, which is hardly surprising given that there are at least twice as many registered cars as people in the Federal Territory, the administrative area that includes Kuala Lumpur.

The crime rate has soared over the past decade. The continuing rise in real estate prices — 30 to 35 percent between 2011 and 2013 — is making homeownership increasingly difficult for even young professionals. Kuala Lumpur’s burgeoning middle class has plenty of reason to grumble.

But its problems pale in comparison with those faced by Kuala Lumpur’s underprivileged, a class that Malaysia’s Economic Planning Unit calls the “urban vulnerable group”: people who possess only the most basic schooling and are either unemployed or earn less than $780 a month per household. Although slums have largely been eradicated from central Kuala Lumpur, dozens of townships formed of cramped public and flimsy zinc-roofed housing fill the outskirts of the city. In the fringes of Setapak that I passed through recently, small children play on dumpsites not far from shanties made of tin and salvaged wood planks. In the low-income suburbs of Sentul and Taman Medan, disaffected youths known as mat rempit indulge in illegal street racing on jazzed-up scooters.

The rapid expansion of Malaysia’s cities requires a radical rethink of the way Malaysians want to live. That in turn requires examining whether we are a country of sophisticated urbanites (think Hong Kong, Tokyo and Singapore) or a country of rural folk, only recently converted to the excitement of city life, but craving, nonetheless, more space, time and leisure. Kuala Lumpur might boast an array of Western-style entertainment options, but its residents’ preferred dining and shopping venues are the night markets and open-air mamak stalls that are the city’s link to life in the provinces. In every luxury mall, the busiest section by far is the food court, an air-conditioned imitation of the hawker centers whose roots lie in the countryside’s casual eating traditions.

This call for a reassessment isn’t about nostalgia, or a naïve rant against development, but an invitation to reconsider the potential role of the countryside in Malaysia’s progress. Improvements in infrastructure and telecommunications mean that small towns are now within easy reach: Parit is less than a three-hour drive from Kuala Lumpur, thanks to the very highway that first ruined its fortunes. The provinces offer space, affordable housing and greater social integration.

Large provincial towns such as Ipoh, 30 miles from Parit, are beginning to experience revivals, the shops and restaurants in its previously run-down historic old town being rejuvenated thanks to real estate investment by Kuala Lumpur dwellers in search of a higher quality of life. But that regeneration has yet to trickle down to the smaller towns in more rural locations farther afield.

Greater investment in Internet and telephone connectivity in the provinces would mean that Parit and other similar towns could easily participate in Malaysia’s fast-growing online-based small-business sector and begin to contribute to, rather than be excluded from, the country’s economic growth. The Malaysian expression for the act of visiting relatives in the countryside is “Balik Kampung,” which translates literally as “Return to the Village.” This might be a good moment to do just that.

Tash Aw is the author of three novels, including, most recently, “Five Star Billionaire.”

Prime Minister Najib’s Aidilfitri Message (as reported by The New Straits Times)

July 17, 2015

Malaysia: Prime Minister Najib’s Aidilfitri Message (as reported by The New Straits Times)

PUTRAJAYA, 16 Julai -- AMANAT...  Perdana Menteri Datuk Seri Najib Tun Razak  ketika mengadakan sidang video dengan tiga Perwakilan Malaysia Luar Negara , Beirut ( Panglima Angkatan Tentera Jeneral Tan Sri Zulkifeli Mohd Zin), Brunei dan Washington di kediaman rasmi hari ini. --fotoBERNAMA (2015) HAK CIPTA TERPELIHARA

Malaysia, as a progressive Islamic nation, had launched the Syariah Index as a scientific means that complements the national system of administration in accordance with Syariah principles.

Despite global and domestic struggles, Muslims in Malaysia are still able celebrate Hari Raya with joy and happiness, said Prime Minister Datuk Seri Najib Razak. In a special televised Hari Raya Aidilfitri address tonight (July 16), the Prime Minister reminded Malaysians that Muslims in several countries were struggling through obstacles, and said Malaysia too had to face many challenges and unforeseen disasters. However, he said the nation’s perseverance was only made possible if it was administered and managed through an effective and efficient leadership.

Najib cited the recent Fitch Ratings which highlighted the nation’s improved prospects from negative to stable. “This has placed Malaysia on a sound economic foundation and well on the right economic track to achieve a high income, advanced economy status by 2020,” he said. He also urged Malaysians to be wary of internal and external threats, including interference by foreign powers, to undermine the nation’s stability and sovereignty.

He called on Malaysians, in the spirit of Aidilfitri, to visit their parents and friends regardless of race and background during the celebration. Malaysians, he said, should stand united and stop slander among religion and friends.”On this auspicious day of Aidilfitri, let us do good. Revive fading relationships, strengthen lethargic brotherhood,” he said.

“Open wide the doors of your heart, the doors of your homes and the gates of kindness through the 1Malaysia window of goodwill,” he said. Najib also said he heard and understood the people’s voices on the rising cost of living. “This is why the government has implemented numerous initiatives to alleviate their burdens, including increasing BR1M contributions this year.”He noted that in the 11th Malaysia Plan, there is an emphasis on assisting households in the bottom 40 per cent. “Rest assured that when all the nation achieves an increase in income, the government will continue to find ways to implement even more initiatives to enhance the people’s wellbeing,” he said.

Meanwhile, Najib said Kuala Lumpur condemned the recent terrorist attacks in Tunisia, Kuwait and France. “The cruel act by the militant Islamic State (IS) had resulted in many deaths as well as leaving hundreds of others injured,” he said, adding that the acts deviated from Islamic teachings which centres around peace as well as moderation. He said such acts could be committed by anyone regardless of their background and geographical boundaries; as such the government had increased its surveillance and security measures to ensure that such extremist beliefs do not spread in the country. Malaysia, he said, continued to sympathise with the plight of the oppressed, such as the Palestinians. “As ASEAN chair, we also sympathise with the Rohingya refugees and played a role in offering the necessary help for them,” he said.

He stated that Malaysia, as a progressive Islamic nation, had launched the Syariah Index as a scientific means that complements the national system of administration in accordance with Syariah principles.

Selamat Hari Raya Puasa–Eid Mubarak

July 17, 2015

From Phnom Penh by The Mekong

Phnom PenhThank you, guys, for your kind wishes and messages of goodwill. Dr. Kamsiah is with me in Phnom Penh, but we both are not repeat NOT in a celebratory mood to welcome the end of Ramadhan and the beginning of Syawal.

Our country is in a total mess due to the weak, incompetent, dishonest and corrupt leadership of Najib Tun Razak. He is a curse for Malaysia and is seen as someone whose pledges and words mean nothing. We will definitely be better off without him. We do not  know how long before UMNO Malays realise that he is taking them down to the road to perdition.Money is not everything.

Dignity and integrity are essential for peace, cooperation and development. Trust in Najib’s leadership is Zero. Najib must go so that we can rebuild our country. Thank you for your very good comments and support for this public service blog. .–Dr. Kamsiah and Din Merican

Selamat Hari Raya Puasa–Eid Mubarak

Kamsiah and Din in Phnom PenhI join Dr. Kamsiah who is now In Phnom Penh to wish all fellow muslims in Malaysia and around the world Eid Mubarak to mark the end of the holy month of Ramadhan. Let there peace and goodwill as we pause to  commemorate Hari Raya Puasa with family and friends (Muslims and Non-Muslims) and pray for better times, especially in Malaysia where the political leadership has been lying to us since Najib became Prime Minister in 2009.

Actually there is nothing to celebrate until our Prime Minister is charged  for breach of trust and abuses of power. But we know that will not happen since our public officials are not interested in doing their jobs in a professional manner.–Dr. Kamsiah and Din Merican.

Good Luck to Malaysia: UMNO’s Future Leaders

June  25, 2015

Good  Luck to Malaysia: UMNO’s Future Leaders

Muka Harapan UMNONo Meritocracy, Yes Kleptocracy

If this is not a rogues’ gallery, what else can it be. You need to be a loyal Najib supporter to make it in Malaysia; there is no hope for the rest of us.  These characters can clean up the coffers of their respective organisations in the name of “membela nasib orang Melayu”. So good luck my beautiful Malaysia. I cry for you, although Argentinians won’t cry for Evita Peron.–Din Merican